Ringing in the new year with a new name, AlerisLife marked the fourth quarter of 2021 and first quarter of 2022 with new collaborations and partnerships that executives said were aimed at enhancing the resident experience and expanding the company’s lifestyle services offerings. And the company hopes to announce more partnerships or strategic investments this year.
In a fourth-quarter earnings call Thursday, President and CEO Katie Potter said that the Newton, MA, company formerly known as Five Star Senior Living expects to add additional lines of business operated through two segments. The residential segment, which the organization formerly called its senior living segment, will have offerings through Five Star Senior Living, now the name of AlerisLife’s residential division. AlerisLife’s lifestyle services segment, what it used to call rehabilitation and wellness services, will have offerings through the company’s Ageility brand.
Following the transition of 107 senior living communities formerly managed for real estate investment trust Diversified Healthcare Trust for residents with higher care needs, Potter said, the company remains committed to operating a sizable portfolio of residential communities aimed at adults with lower care needs who are able to choose where they live.
Investments in strategic collaborations with third-party service providers — Compass Community Living for dining services and DispatchHealth for in-home acute care services — were made to make the company more competitive, she said.
Residential operating results
AlerisLife saw occupancy growth in the fourth quarter despite labor challenges, the omicron variant of COVID-19 and a “highly competitive” market, the company reported. Average occupancy in the company’s 20 owned senior living communities increased 210 basis points (2.1%) from the third quarter, whereas average occupancy in its portfolio of 120 comparable managed communities increased 70 basis points (0.7%).
Sales lead volume for January decreased 362 basis points (3.62%) from January 2021 to January 2022, according to a February investor presentation. Tour volume for January increased 1,748 basis points from January 2021.
Potter said she believes that the peak of rent concessions — which remained elevated during the holiday season — has ended, and rates are increasing in 2022. Community operators increased rents 5% to 10% in January, depending on the market.
Chief Financial Officer Jeff Leer said the company expects to invest $12 million in its owned residential portfolio this year, investing an additional $2 million to $4 million in technology.
“With much of the reorganization behind us, we continue to invest in our corporate infrastructure and our team and push AlerisLife forward,” Potter said. “We remain focused on optimizing our core competencies, including continuing to deliver an exceptional and enhanced resident experience to senior living and active adults residents while also offering lifestyle services to choice-based consumers.”
Ageility
Potter said there is significant potential to continue to increase AlerisLife’s Ageility lifestyle services segment, pointing to “robust” growth in the Ageility fitness service line during the pandemic. During the fourth quarter, fitness revenues increased more than 30% year over year, and they were up more than 4% compared with the third quarter. She called the service pandemic-tested and able to generate growth through the emergence of COVID-19 variants.
“We will remain nimble and endeavor to anticipate the changing needs of our customer base in order to attract and retain residents within the communities we own and manage,” Potter said. “As a result, we are focused on sourcing opportunities that meet the needs of choice-based customers who diversify our revenue stream but also drive performance in our residential segment.”
AlerisLife hopes to announce new partnerships or strategic investments as it works to expand the lifestyle services segment, she said.
